 Hello and welcome to NewsClick. The Caravan magazine did a cover story titled Cold Gate 2 on the Cold Scam. To discuss the issue we are joined by Paranjay Gowar Thakurtha. Welcome to NewsClick Paranjay once again. Thank you Paranjay. So this cover story of Caravan which talks about how the Cold Scam has continued in the Modi government despite the Supreme Court order of 2014. Can you throw some light on this story and what does it talk about basically? The cover story titled Cold Gate 2.0 by Nelina M.S. of Caravan magazine, it's March 2018 issue, throws light on how one particular group and that's the Adani group with a Rajasthan government company and also with the support of the Chhattisgarh government both of which have been ruled by the Bharti Chantapati, how the Adani group appears to have gone ahead without adhering to the Supreme Court's Supreme Court's directions, I would say orders. Just let's step back a little bit in time. In August 2012 the controller and auditor general of India, they put out a report which said that the manner in which hundreds of cold blocks had been allotted over a long period of time all the way from the early 90s that these were done in an illegal and irregular manner. In fact, they documented the total loss to the government was 1.86 lakh crores. It was a huge scam. Roughly two years later in September 2014, the Supreme Court decided that it would cancel the allocation of all these cold blocks that were allotted between 1993 and 2011. That was 214 of them out of 218, all but four and these were all given to public sector companies. Now what we see according to this report, it's been very, very well documented that a particular joint venture by the Rajasthan government, the Rajasthan Rajya Vidyottupadhan Nigam Limited, that is in English it is the Rajasthan government's, the state government's electricity generation or electricity producing company together with Adani Enterprises Limited, which is a flagship company of the corporate conglomerate headed by Gautam Adani. They continued with a joint venture which was against the norms that have been specified by the Supreme Court. And in fact the Supreme Court had categorically written that the way in these joint ventures were structured defeated the purpose of the law. What was the law? The coal mines nationalization act of 1973. The structure of that joint venture was that 74% was held by the Adani group and 26% by the state government whereas it should have been just the other way around. And this pertains to the way this particular joint venture is operating a coal block, two coal blocks which are adjacent, the Parsa Kanta block and that's the Parsa East and the Kanta Basan block. This is all in the Sarguja district of Chattisgarh and it clearly shows that this joint venture which should have been disbanded because this has been in existence since 2007. After September 2014 it should have been wound up in a new or a different joint venture should have been done but that was not done. So you mean to say that this entire joint venture continued on the preconditions before like whatever was prescribed between 2014 judgment. Can you throw more light specifically on what has happened in Rajasthan and what has happened in Chattisgarh when it comes to the BJP government involved in this? Now what has been written is that this private company is like a coal mine operator, is like a contractor. But the coal ministry in its response to what was written, what has been written by Nelina in Caravan says that it is like a contractor but the fact is it is not just a contractor, it is the major shareholder, it's the owner and the contractor. Now what is seen earlier in 2012 that the report of the controller and auditor general clearly stated that the Chattisgarh state power generation limited entered into a mining services agreement which with Adani Group Company, Adani Mining which later became a part of Adani Enterprises which resulted in a loss of 1,549, about over 1,500 crore rupees. Now the interesting part of the whole story is that we see that the Rajasthan government earlier headed by Ashok Geloth and subsequently by Vasudha Rajay continued with this agreement. Roughly a year after the Narendra Modi government came to power a new law was put in place. This was called the coal mines special provisions act of 2015. Now this law said that all captive coal blocks if they are to be given on a lease or on the basis of an agreement to a private company there should be an auction process. Now clearly this was not followed in the case of the joint venture involving the Rajasthan government's company that is the Rajasthan Rajya Vidyott Putpadan Nigam Limited and Adani Enterprises. And according to the calculations made in that caravan article the Rajasthan government company will be paying this joint venture at least 6,000 crore rupees more over a 30 year period. And the benefits that is the second part of the story which is about the fuel benefits about which I can talk to you create a detail would give it an additional 1,000 crores over this period of time. So according to the caravan magazine's article these are conservative estimates if anything the actual numbers could be far higher. And the amount that they are paying is actually more than what they should actually be getting for free. Now you see there are two parts to this thing. One is the manner in which the joint venture itself has been allowed to operate apparently against the Supreme Court's directions. There is a second part to the story. The way in which you have a coal mining and a delivery agreement the Rajasthan government is paying much more for coal than what it should be. If you look at the quality of the coal that has been mined and in terms of calorific values and other indicators what is according to this article and you know this data is often not disclosed but in this case the data has been disclosed. It shows that the joint venture is going to benefit more than it should in terms of the quality of coal. And there is another part to this story which I think is worthy of discussion and that is the location of the mine itself. You see this Parsa East and Kanta Basin is in the Sarguja district of Chattisgarh. It is one of the most lucrative and profitable open-cast coal mines. That means the coal is located relatively close to the surface of the earth. Now this is north of a forest area called the Hans Teo Aarand Forest which according to the government of India is one of the largest uninterrupted biodiverse forests of this part of the world. In central India. In fact there is a long history of how the local population, the tribal communities have been up in arms and in fact the Chattisgarh government under Raman Singh has had the dubious distinction of being perhaps the first state in the country to revoke rights which were already granted under the Forest Rights Act. And it's interesting that Jairam Ramesh who was the environment minister in the UPI government when he was environment minister he actually opposed the views of the then Chief Minister of Rajasthan which was Ashok Elath in allowing coal mining to take place in this area. You see so what is very very clear is that it's at two or three different levels. Now the Rajasthan, Rajya, Vidyutipadhanigam Limited is perhaps the only one out of 77 state government companies that apparently did not comply with the direction of the Supreme Court in structuring its joint venture. Two, the way in which the whole quality of coal supplied was apparently inflated. It gave undue benefits to the private party in this case the Adani group. And thirdly they've been allowed to go ahead with mining this area despite not following the green laws and the environment laws. So can you also throw some light on what actually would have been the loss to the government when it comes to these things and what would have been the profit that the Adani would have received. See if you go by the statistics and the calculations made in this article it's not less than 7000 crores. Mind you this is a period of over three decades but this would be as I go back not less than 7000 crores. That's really the gain that has come. I mean that's the gain to the private party and the corresponding loss is to the government. That's right. Adani group has a history of doing this with different public sector undertakings and I would like to go back to a book that came out few days ago which talks about GSPC. Why is there no check in balance when it comes to these things? All I can say is that you know if the government chooses not to act if the government chooses to turn a blind eye then people get away. This is a form of crony capitalism that we are seeing. Now it's not eye. It's a CAG. That is the controller and auditor general of India. It's a constitutional authority. It is supposed to oversee the way in which public finances are being spent. Now whether in the case of the coal mine in Sarguja that is the Parsakhanta coal fields or whether it's the way in which the Gujarat State Petroleum Corporation has dealt with the Adani Groups Company all of it I mean the auditor has put out in black and white quantified it literally to the last rupee. The losses to the Exchequer and the undue benefit that has been given to a private firm or a private group. Now if the government despite this kind of strong evidence it's not I or you or somebody making these allegations it's the CAG making the allegation. Then the answer seems very obvious as to why no action is being taken. And especially it's the same BJP which went gaga over these camps and was campaigning in full mode about 2G and Colgate. Absolutely correct and let's also accept that there were two members of parliament belonging to the BJP who are both today ministers one is Prakash Yavdekar and the other is Hans Raj Ahir who went the forefront of exposing the Colgate scam and bringing it up in parliament and in the press and writing and talking and shouting about it all along. Now it's interesting when we look at Colgate part 2 that I refer to you another article which was written by Noor Muhammad in The Wire. Now here was after all this scandal has happened the then energy minister who's still the coal minister that's Mr. Piyush Koyal he came up with a new scheme where he said that these coal blocks these allocation of coal blocks and linkages that would be given by coal India limited. After all coal India limited is still the biggest producer of coal in this country. It produces about 80% of the total coal that is mined in this country and now what had happened and he said there would be a reverse bidding procedure. What did this mean? That means that those companies which would use this coal for power generation the lowest they would reduce the electricity tariff to the consumer they would get the coal. So this was a way in which was according to Mr. Piyush Koyal would be benefitting the consumer and they give it nice name. This government loves these acronyms they called it shakti which is an acronym for scheme for harnessing and allocating koela transparently in India. Now it's interesting that in September 2017 coal India limited allotted over 27 million tonnes of coal to 10 private power plants for a period of 25 years. Now you look at which were these companies you'll see that roughly one third of this coal was going to the Adani Group's power plants. Now it's interesting that the Adani Group has said it will bring down tariff in this reverse bidding process by between 1 paisa and 4 paisa but there are another set of calculations that can be done which says the reduction could be much much more that it could be perhaps as high as 50 paisa per unit which is 1 kilowatt hour which means according to the calculation in this article written by Noor Muhammad the gains the windfall gains to these 10 power companies could be as much as 50,000 crores. So we are seeing a series of these benefits going to particular companies who are what should I say in the good books of the present regime. Also I mean if we go by this article wouldn't it be also the contempt of the code because the scams have continued on the basis of previous arrangement. Absolutely now you it's interesting that though the ministry of coal responded to the journalist when she wrote this article the others did not the Rajasthan government did not the Chhattisgarh government did not the Adani group did not. So I mean you can draw your own conclusion I mean if you are violating the regulations and the guidelines and the directives that have been put out by the apex code in India it's actually much worse than contempt of code. You are violating the law of the land you are getting undue benefits which you should not be getting at the expense of the people of this country. Thank you for watching NewsClick.